Q3 2019 Western Washington Gardner Report

Q3 2019 | WESTERN WASHINGTON

presented by

windermere.com

The following analysis of the Western Washington real estate market is provided by Windermere Real Estate Chief Economist Matthew Gardner. We hope that this information may assist you with making better-informed real estate decisions. For further information about the housing market in your area, please don’t hesitate to contact me.

ECONOMIC OVERVIEW Washington State employment has softened slightly to an annual growth rate of 2%, which is still a respectable number compared to other West Coast states and the country as a whole. In all, I expect that Washington will continue to add jobs at a reasonable rate though it is clear that businesses are starting to feel the effects of the trade war with China and this is impacting hiring practices. The state unemployment rate was 4.6%, marginally higher than the 4.4% level of a year ago. My most recent economic forecast suggests that statewide job growth in 2019 will rise by 2.2%, with a total of 88,400 new jobs created.

HOME SALES ❱❱

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There were 22,685 home sales during the third quarter of 2019, representing a slight increase of 0.8% from the same period in 2018 and essentially at the same level as in the second quarter.

Listing activity — which rose substantially from the middle of last year — appears to have settled down.

This is likely to slow sales as there is less choice in the market.

Compared to the third quarter of 2018, sales rose in five counties, remained static in one, and dropped in nine. The greatest growth was in Skagit and Clallam counties. Jefferson, Kitsap, and Cowlitz counties experienced significant declines.

The average number of homes for sale rose 11% between the second and third quarters. However, inventory is 14% lower than in the same quarter of 2018. In fact, no county contained in this report had more homes for sale in the third quarter than a year ago.

ANNUAL CHANGE IN HOME SALES Skagit County

11.0%

Clallam County

10.8%

Thurston County

5.6%

King County

2.8%

Snohomish County

1.0%

Lewis County

0.0%

Pierce County

-0.4%

Grays Harbor County

-0.8%

Island County

-0.9%

Whatcom County

-2.3%

Mason County

-4.2%

San Juan County

-5.4%

Cowlitz County

-8.2%

Kitsap County

-8.7%

Jefferson County

-11.8% -10%

THE GARDN E R RE PORT | W I N DERM ERE RE A L ESTATE

Q3-2018 TO Q3-2019

-5%

0

5%

10%

Q3 2019 | WESTE RN WA SHINGTON

HOME PRICES ❱❱

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Home price growth in Western Washington notched a little higher in the third quarter, with average prices 4.2% higher than a year ago. The average sales price in Western Washington was $523,016.

It is worth noting, though, that prices were down 3.3% compared to the second quarter of this year.

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When compared to the same period a year ago, price growth was strongest in Grays Harbor County, where home prices were up 22%. San Juan, Jefferson, and Cowlitz counties also saw doubledigit price increases.

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Affordability issues are driving buyers further out which is resulting in above-average price growth in outlying markets. I expect home prices to continue appreciating as we move through 2020, but the pace of growth will continue to slow.

Home prices were higher in every county except Island, though the decline there was very small.

ANNUAL CHANGE IN HOME SALE PRICES WHATCOM SAN JUAN SKAGIT ISLAND SNOHOMISH

CLALLAM

JEFFERSON KITSAP GRAYS HARBOR

MASON

THURSTON

-1.0%–0.0%

KING

PIERCE

LEWIS

0.1%–3.9% 4.0%–7.9%

COWLITZ

8.0%–11.9% 12.0%+

Q3-2018 TO Q3-2019

Grays Harbor County

22.0%

San Juan County

19.0%

Jefferson County

16.0%

Cowlitz County

13.4%

Lewis County

9.7%

Thurston County

8.9%

Pierce County

6.1%

Mason County

5.3%

Snohomish County

4.2%

Skagit County

3.9%

Kitsap County

3.8%

Whatcom County

3.7%

Clallam County

2.7%

King County

1.9%

Island County

-0.2% -5%

TH E GA RDN E R R E PO RT | W I N D ER M ER E R E A L ESTATE

0%

5%

10%

15%

20%

25%

Q3 20 1 9 | WESTE R N WA S H I N GTON

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The average number of days it took to sell a home dropped one day when compared to the third quarter of 2018.

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Thurston County was the tightest market in Western Washington, with homes taking an average of only 20 days to sell. There were six counties where the length of time it took to sell a home dropped compared to the same period a year ago.

Market time rose in six counties, while two counties were unchanged.

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Across the entire region, it took an average of 38 days to sell a home in the third quarter. This was down 3 days compared to the second quarter of this year.

Market time remains below the long-term average across the region and this trend is likely to continue until more inventory comes to market, which I do not expect will happen until next spring.

AVERAGE DAYS ON MARKET

Q3-2019

T KE AR M

SE LL ER ’S

T KE AR M

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CONCLUSIONS

BU YE R’ S

DAYS ON MARKET

This speedometer reflects the state of the region’s real estate market using housing inventory, price gains, home sales, interest rates, and larger economic factors. I am leaving the needle in the same position as the first and second quarters, as demand appears to still be strong.

Thurston County

20

Kitsap County

23

Pierce County

23

Snohomish County

25

King County

28

Skagit County

30

Cowlitz County

31

Whatcom County

33

ABOUT MATTHEW GARDNER

Mason County

34

Lewis County

36

Island County

39

Jefferson County

43

As Chief Economist for Windermere Real Estate, Matthew Gardner is responsible for analyzing and interpreting economic data and its impact on the real estate market on both a local and national level.

Matthew has over 30 years of professional experience both in the U.S. and U.K.

Clallam County

46

Grays Harbor County

48

San Juan County

108 0

20

40

60

80

100

The market continues to benefit from low mortgage rates. The average 30-year fixed rates is currently around 3.6% and is unlikely to rise significantly anytime soon. Even as borrowing costs remain very competitive, it’s clear buyers are not necessarily jumping at any home that comes on the market. Although it’s still a sellers’ market, buyers have become increasingly price conscious which is reflected in slowing home price growth.

In addition to his day-to-day responsibilities, Matthew sits on the Washington State Governors Council of Economic Advisors; chairs the Board of Trustees at the Washington Center for Real Estate Research at the University of Washington; and is an Advisory Board Member at the Runstad Center for Real Estate Studies at the University of Washington where he also lectures in real estate economics. © 2019 Windermere Services Company. All rights reserved.

TH E GA RDN E R R E PO RT | W I N D ER M ER E R E A L ESTATE

Q3 20 1 9 | WESTE R N WA S H I N GTON